Why does the UK have so many poor people?

[KenDodd]

Just that really.
Why do you think?

I think a lot of the baby boomers put their fortunate circumstances down to themselves, when most of it was pure luck.

Mortgages were cheap, money went further, the pound was stronger and their houses have shot up in value. Lower retirement age, better pensions etc

Yet they always say it was down to their own hard work, snowflakes dont know what hard graft is these days etc

I don't doubt they worked 'hard' (as in, full time over many years) but nothing exceptional, and no more than what people do now.

It does irritate me a little.

I think a lot of the baby boomers put their fortunate circumstances down to themselves, when most of it was pure luck.

Well, I suppose that is an improvement on “the baby boomers are vultures who deliberately ruined our future”.

I am not a baby boomer, but the parents of many of the posters on here will be. Do you grudge them their perceived luck?

@wolfgirl

Mortgages were not cheap. Interest rates of 12% were common. Today, it’s about 2%.

As for lower retirement age, the last decade of baby boomers are still working. I’ll retire at 67 - much like you !

We were “lucky” with house prices, but pensions for most were not better. Employers offering pensions only became compulsory in the last 5 years. So many boomers will have worked their whole lives with nothing except the state pension to fall back on.

Please get your facts right before you judge people.

Baby boomers are far from a homongenous group. My working class parents did not benefit from final salary pensions and not everyone was lucky enough to have benefitted from the huge increase in house prices.

However I think there were more people then in that fortunate position than there are today. High interest rates were coupled with high inflation and wage growth which rapidly eroded away mortgage debt. Young people today are stuck with low rates of wage growth, high levels of debt (from tuition fees etc) and unaffordable housing. Social mobility in the UK has also fallen whilst inequality has risen. Public services are chronically underfunded and contributing to greater inequality of outcomes.

Not this again. I would much rather pay 12% interest on the mid-1980s house price average of £35 000 than 2% on the post-2005 average of around £220k. Why won't baby boomers accept the reality of modern inflation and low wages? State pensions will not exist for future generations, that's why it's become compulsory for employers. It doesn't help when wages are so low, most employers are small, and real laws holding employers to account are minimal and weak.

No group is ever totally homogenous, and there are always individuals who lose out for whatever reason. But please try to recognise systemic disadvantage, and that one of the main identifiers of those who will suffer from it is age.

Average house price in 1980 £25000
Average wage in 1980 £6000
Loan to wage ratio 4 x salary

Now
Average house price £247,000
Average wage £35,000
Loan to wage ratio 7x salary

They are the key bits.

Now the interest

12%
£25000 Loan would be a total of £78992 paid back
So £53992 in interest

2% £247,000 would be a total of £314,076 back
So £67,076 interest

So we are living through your mortgage hell, but worse as the loan to wage ratio is so much harder to get.

@Iamthewombat not at all, good for them, anyone else would do the same wouldn't they? But they read the daily mail and blast young people that can't afford a house as 'lazy snowflakes' that should 'stop spending their money on rubbish and save properly like we had to'. Whilst neglecting the fact the average house is now 6 x the average salary compared to 2 x the average salary in the 70s....

That's exactly it Wolfgirrl. They sit there on their triple-locked pensions that working-age people pay for and will never see ourselves, after a lifetime of enjoying benefits we will never see and public institutions that have been destroyed, and are totally ignorant of those facts. They employ that ignorance in their voting habits and social attitudes.

Many thanks EvilPea, I've been meaning to do that sort of financial analysis for a while. Unlike the elderly generation, I don't have the time with work and children. They could have done it if they had any interest or care about the wellbeing of the public sphere, but they don't and never have, that's why it's all been destroyed on their watch.

weepingwillow22
My working class parents were never home owners or pension holders either. They were still more fortunate than a young family in a similar position today. They had access to a council home so we always had a secure, affordable roof over our heads. They had state benefits we could live on as well.

An example of how things have changed.
I have a friend, her baby boomer parents were both teachers, they had two children and lived in a nice house in the south east. Her mum took a decade off work to look after the children. They went on holiday, mostly abroad, every year. Both retired at 60.

My friend and her husband have followed a very similar life path. Both are now mid 40s, hcp and they have two children. They live in a smaller house than she grew up in, still their own though, in the SW because they can't afford the SE where she grew up. She hasn't been able to take any time off beyond maternity leave because they couldn't afford it. They do go on holiday every year though, usually abroad. They won't be able to retire at 60 and their combined income is only very slightly more than her parents get in pension payments.

Thatcher, New Labour, Austerity policy for the past 10 years, none of that have helped. Low wages, high living costs. Most poverty is recorded comparatively (so because most people in UK are rich on a global level and poor in UK is in relation to average wage in UK then our poor are not as poor, that said we have had a rise in absolute poverty too).

Housing is a big issue people don't talk about enough. Until we start building enough housing that is affordable then we will always have issues. And I don't mean the "affordable housing" the government build now which still involves a deposit and mortgage

Why won't baby boomers accept the reality of modern inflation and low wages

I am a baby boomer I worked 6 jobs to be able to afford a place. (Tiny studio flat in need of work)
Most young people weren’t on an average salary and the cheapest places in some areas were many times their salary.

I came out with in 1980 £80 per month. I was on just over £1000 per year.
Cheapest flat was £17,000 (we lived in London and it was before Rightmove so you couldn’t really compare house prices in different neighbourhoods)
So you could say Loan to wage Ratio was 17x

Dd works 6 jobs to able to afford a tiny flat which needs work.
She saved and bought her first place (for cash for almost 1/3 of our first place) doing pretty much the same things we did.
Ds is doing the same thing and hopes to be buying his first place later this year. He is 18.

As far as I can see the only thing that has changed is location.
DCs places are no where near where they live but are a means to an end.

I have been on threads where FTBs say they can’t afford to buy yet if you dig deeper what they mean is they can’t afford to buy a particular type/sized house in a particular road or area. They won’t entertain looking at perfectly nice areas one stop on the train or even just 4-5 miles away

There was a poster who worked in Oxford and wouldn’t move out of the City as that is where she wanted to live.

Having worked in Oxford no one I knew actually lived in the quaint but extremely pricy terraced cottages because they couldn’t afford to.
They commuted in from anywhere from Didcot to Banbury or even Northamptonshire.

I would say it isn’t about not being able to afford to buy a place but not being able to buy a particular type of place in a particular area

I’m absolutely convinced most of it comes from housing and a lot of issues stem from that.
Lack of social housing, no secure homes, permanently living 2 months away from Eviction, never being able to make sure your kids can start and finish at the same school as you might be priced out the area during their time at the school.
Not having a “home” does a lot for your mental health, never being able to plan or decorate your kids room, no pets, not being able to plant a garden or grow anything more then pot plants. Worrying everytime the kids drop or spill something as your acutely aware it’s not yours and you’ll be paying for it at the end.

Then when you do get evicted it’s the cost of moving, boxes, post redirection, vans, I was charged £100 to move my internet mid contract last move, deposits, reference fees.
You always need that available as you never know when that letter will fall on your doorstep.

Never feeling part of the community as your “only the renters”.
Then there’s rent increases:
Our lastlandlord gave us a 40% increase one month! Didn’t get a 40% pay rise. But you’ve kids so you can’t move them easily.

Families moving miles away from support networks to try and buy somewhere or get housed by the social there as there are no houses for benefit claimants in the area.

So are you putting the fact that home ownership has fallen and the age of rtb risen down to people being fussy/lazy? How does house size shrinking PMS square with young people being more fussy these days?

I’m absolutely convinced most of it comes from housing

I agree. I said up thread that I think a massive increase in social housing would do more to reduce poverty than anything else. Most people are homeowners though and don't vote for it.

@Oliversmumsarmy where was your studio flat out of interest? And 6 full time jobs? How on earth did you find the time?

We didn’t work 6 ft jobs. We had 1 ft job and 5 other p/t jobs evenings and weekends doing bar work or shelf stacking etc

Evil Pea at 10:29 sums the issue up perfectly and also reveals why mental health Issues are such a huge problem these days. Another disadvantage is children not having friends round to play/ sleepover because they live in a tiny flat. It really is soul destroying to live like that.

Oliversmumsarmy please explain more about the 6 jobs (running concurrently?) I’m intrigued

So a full time job and 6 part time jobs, a at the same time? How did you find time to sleep? Did you ever have a day off?

The switch from secure council tenancies to private renting is a huge issue. It's just not a good model for providing secure housing.

The Italian people I've known think our standards for rented housing is low.
Yup. We pay £1100 a month and I can't close my kitchen cupboards because they are from the 70s and my modern plates are too big

I do think there are things the UK does better than Italy though, especially SEND education, and representation (eg, BAME and disabled presenters on cbeebies)

I can't close my kitchen cupboards because they are from the 70s and my modern plates are too big

Actually I think that's another modern life issue (completely separate! ) I think our bigger plates contribute to obesity. Plates are much bigger than they used to be.

I think the move towards private renting and away from social housing is also a housing benefit time bomb for the younger generation (again) to pick up.
In the past those who could afford to buy a home did so, paid the mortgage off during their working life, retired mortgage free so with minimal ongoing housing costs. Those who couldn't afford to buy lived in council houses, paid rent during their working lifes, this would have more than paid for the cost of the house. When they retired if they claimed housing benefit this was just money moved from one council department to another, effectively no cost to taxpayers just minimal ongoing housing maintenance costs.

Today, lost of people still buy, so just as above, no cost to taxpayers. People who can't afford to buy are more often in private renting, they pay rent their whole working lives, when they retire, unless they have a very healthy private pension (unlikely) they taxpayer will have to pick up the bill for twenty years of housing benefit payments paid to their private landlords. The cost for this is going to be astronomical.

Surely there will eventually come a point where paying housing benefit to retired generation rent won't be affordable. I wonder if these people will have to be moved on to cheaper areas or warehouse in small units or something grim.